BoR (11) 06b BEREC report NGA Country Cases - IRG

3.4 ODF unbundling
FttH
BoR (11) 06b
In the market-analyses (finalised December 2008 ) the unbundled fibre service (ODF Access)
is defined in the same market as unbundled local loop services (MDF and SDF Access). KPN
and its joint venture Reggefiber has been identified as market players with significant market
power (SMP) for this wholesale market.
Based on these SMP an access obligation applies for Reggefiber for the non-discriminatory
provisioning of ODF Access and the ancillary services Collocation and Backhaul. This access
obligations also contains the publication of a Reference Offer (one month after the market
analysis decision).
An announcement period of two months applies to changes in the references offer (including
new services). The non-discrimination obligation contains the obligation that KPN can not
launch a retail product based on this new wholesale product during this announcement period.
The non-discrimination obligation also includes a rule to prevent margin squeeze.
For the tariff regulation a separate policy paper has been drawn by OPTA (http://www.opta.nl/
en/news/all-publications/publication/?id=2832) in which the pricing principles of tariff
regulations for ODF Access is described. Key point is to strike a balance between stimulating
investments (and innovations) and remain a competitive environment. Important element of
the tariffs is that the prices depend on the actual CAPEX per line in an developed area (called
„aansluitgebied‟). Depending on the characteristics of the area (dense or more rural) a
different tariff applies. These tariffs range from 12 – 17 Euro per line/per month (without
discount) and 100 Euro installation fee.
OPTA sets a price-cap which is stable and predictable over a long period (price t=0 + yearly
price indexation) including a reasonable rate of return (allowing a limited – project specific
fibre – risk premium). OPTA checks the actual returns every new regulatory period (3 years)
and compares the actual return with the allowed reasonable rate of return Over performance
(„excessive return‟) leads to a downward adjustment of the price cap (In this check, OPTA
allows some extra return to limit the asymmetric regulatory risk, which is the risk that the
regulator skims of positive returns while negative returns are for the risk of the investor).
Under performance does not lead to an upward adjustment of the price cap. Under
performance is for the risk of Reggefiber.
Tariff regulation by OPTA also contains risk sharing elements (an investment-contribution per
line), volumes discounts based on total market volume to stimulate penetration and allowed
regional price difference (based on actual CAPEX/line) facilitating investment incentives.
Based on the principles OPTA has set a tariff ceiling for ODF Access, Collocation and
Backhaul Services (http://www.opta.nl/nl/actueel/alle-publicaties/publicatie/?id=2976).
201